1.Purpose.
The purposes of The St. Paul Travelers Companies, Inc. 2004 Stock
Incentive Plan (the “Plan”) are (i) to attract and retain Employees by
providing competitive compensation opportunities, (ii) to provide
Employees with incentive-based compensation in the form of Company Common
Stock, (iii) to attract and compensate non-employee directors for service
as Board and committee members, (iv) to encourage decision making based
upon long-term goals, and (v) to align the interest of Employees and
non-employee directors with that of the Company’s shareholders by encouraging
such persons to acquire a greater ownership position in the Company.

2. Definitions. Wherever used herein, the following terms shall
have the respective meanings set forth below:

“Award” means an award to a Participant made in
accordance with the terms of the Plan.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.

“Company” means The St. Paul
Travelers Companies, Inc.

“Committee”
means the Compensation Committee of the Board, or a subcommittee of that
committee, consisting of no less than two directors, all of whom shall qualify
as “independent directors” within the meaning of Rule 303A of the New York
Stock Exchange, as “outside directors” within the meaning of Section 162(m)
of the Code, and as “non-employee directors” within the meaning of
Rule 16b-3 under the Exchange Act.

“Common Stock” means the common stock of the Company.

“Change
of Control” means the first to occur of (i) any “person” within the
meaning of Section 14(d) of the Exchange Act, other than the Company,
a subsidiary or any employee benefit plan(s) sponsored by the Company or any
subsidiary, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the then-outstanding Common Stock, other than pursuant to a purchase of
Common Stock from the Company; (ii) individuals who constitute the Board
on the effective date of this Plan, cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the effective date of this Plan, whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least three quarters
of the directors comprising the Board on the effective date of this Plan
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this clause (ii), considered as
though such person were a member of the Board on the effective date of this
Plan; (iii) any plan or proposal for the liquidation of the Company is
adopted by the shareholders of the Company; (iv) all or substantially all
of the assets of the Company are sold, liquidated or distributed (in one or a
series of related transactions); or (v) there occurs a reorganization,
merger, consolidation or other corporate transaction involving the Company (a
“Transaction”), in each case, with respect to which the shareholders of the
Company immediately prior to such Transaction do not, immediately after the
Transaction, own more than fifty percent (50%) of the combined voting power of
the Company or other entity resulting from such Transaction in substantially
the same proportion as their ownership of the voting power of the Company
immediately prior to such Transaction.

“Employee”
means an employee, including non-employee directors, as defined in General
Instruction A to the Registration Statement on Form S-8 promulgated under
the Securities Act of 1933, as amended, or any successor form or statute, as
determined by the Committee.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time,
and any successor thereto.

“Fair
Market Value” means, as of a specified date, one of the following as determined
by the Committee, each of which shall be based on trading prices of a share of
Common Stock on the New York Stock Exchange or on any national securities
exchange on which the shares of Common Stock are then listed, or if the shares
were not traded on such date, then on the next preceding date on which such
shares of Common Stock were traded, all as reported by such

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source as the Committee may select: (i) the average of
the high and low trading prices on such date, (ii) the closing price on
such date or (iii) the closing price on the next preceding day.

“ISO” means an incentive stock option as defined in
Section 422 of the Code.

“Option
Proceeds” means the cash actually received by the Company for the exercise
price in connection with the exercise of a stock option granted under the Plan
or the Prior Plans that is exercised after the effective date of the Plan plus
the tax benefit that could be realized by the Company as a result of such stock
option exercise, which tax benefit shall be determined by multiplying
(a) the amount that is deductible for federal income tax purposes as a
result of such stock option exercise (currently, equal to the amount upon which
the Participant’s withholding tax obligation is calculated) times (b) the
maximum federal corporate income tax rate for the year of exercise. To the
extent a Participant pays the exercise price and/or withholding taxes with
shares of Common Stock, Option Proceeds shall not be calculated with respect to
the amounts so paid with shares.

“Participant” means an Employee who is selected by the
Committee to participate in the Plan.

“Performance
Conditions” may, for purposes of Awards under the Plan, include one or more of:
earnings per share, earnings before interest and tax, net income, adjusted net
income, operating income, stock price, total shareholder return, market share,
return on equity, cash return on equity, achievement of profit, loss and/or
expense ratio, revenue targets, cash flows, book value, return on assets or
return on capital. Such Performance Conditions may be based on the attainment
of levels set for such financial measures with respect to the Company or any
subsidiary, division, business unit, or any combination thereof and may be set
as an absolute measure or relative to a designated peer group or index of
comparable companies. Such Performance Conditions shall be set and defined by
the Committee within the time period prescribed by Section 162(m) of the
Code. Unless specifically determined by the Committee at the time a Performance
Condition is set, the satisfaction of any Performance Condition shall be
determined without regard to any change in accounting rules which becomes
effective following the time such Performance Condition is set.

3. Shares Subject to the Plan. Subject to adjustment as provided in
Section 20, the number of shares of Common Stock which shall be available and
reserved for grant of Awards under the Plan shall be 35,000,000. The shares of
Common Stock issued under the Plan may come from authorized and unissued shares
or shares purchased in the open market. No Participant may, in any consecutive
thirty-six (36) month period, be granted Awards of stock options and stock
appreciation rights under Sections 7 and 8 of the Plan, respectively, with
respect to more than 3,000,000 shares of Common Stock or more than 1,000,000
shares of restricted stock under Section 9 of the Plan, each of which
numbers shall be subject to adjustment as provided in Section 20.

Shares of Common Stock subject to an Award that
expires unexercised, that is forfeited, terminated or canceled, that is settled
in cash or other forms of property, or otherwise does not result in the
issuance of shares of Common Stock, in whole or in part, shall thereafter again
be available for grant under the Plan. If the exercise price of any stock
option is satisfied by delivering shares of Common Stock to the Company (by
tender of such shares or attestation) or by authorizing the Company to retain
shares of Common Stock, only the number of shares of Common Stock delivered to
the Participant net of shares of Common Stock delivered to the Company (by
tender or attestation) or retained by the Company shall be deemed delivered for
purposes of determining the maximum number of shares of Common Stock available
for grant under the Plan. To the extent any shares of Common Stock subject to
an Award are not delivered to a Participant because such shares are used to
satisfy an applicable tax or other withholding obligations, such shares shall
not be deemed to have been delivered for purposes of determining the maximum
number of shares of Common Stock available for grant under the Plan. Shares of
Common Stock purchased by the Company on the open market using Option Proceeds
shall also be available for grant under the Plan; provided, however, that the
increase in the number of shares of Common Stock available for grant pursuant
to such market purchases shall not be greater than the number that could be
repurchased at Fair Market Value on the date of exercise of the stock option
giving rise to such Option Proceeds. Except as otherwise provided by the
Committee, the provisions of this paragraph shall also apply to any awards
granted under the Prior Plans that are outstanding on the effective date of the
Plan. In addition, the number of shares of Common Stock available for grant
under the Plan shall not be reduced by shares subject to Awards granted upon
the assumption of or in substitution for awards granted by a business or entity
that is merged into or acquired by (or whose assets are acquired by) the
Company.

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4. Administration.

4.1 Committee
Authority. The Committee shall have full and exclusive power to
administer and interpret the Plan, to grant Awards and to adopt such
administrative rules, regulations, procedures and guidelines governing the Plan
and the Awards as it may deem necessary in its discretion, from time to time.
The Committee’s authority shall include, but not be limited to, the authority
to:

(i)determine the type and timing of Awards
to be granted under the Plan;

(ii)select Award recipients and determine the extent of their
participation; and

(iii)establish all other terms, conditions, restrictions and
limitations applicable to Awards and the shares of Common Stock issued pursuant
to Awards, including, but not limited to, those relating to a Participant’s
retirement, death, disability, leave of absence or termination of employment.

The Committee’s right to make any decision, interpretation
or determination under the Plan shall be in its sole and absolute discretion.

4.2 Administration
of the Plan. The administration of the Plan shall be managed by the
Committee. The Committee shall have the power to prescribe and modify, as
necessary, the form of Award document, to correct any defect, supply any
omission or clarify any inconsistency in the Plan and/or in any Award document
and to take such actions and make such administrative determinations that the
Committee deems appropriate in its discretion. Any decision of the Committee in
the administration and interpretation of the Plan, as described herein, shall
be final, binding and conclusive on all parties concerned, including the
Company, its shareholders and subsidiaries and all Participants.

4.3 Delegation
of Authority. The Committee may at any time delegate to a committee
of the Board or one or more officers of the Company some or all of its
authority over the administration of the Plan, with respect to persons who are
not subject to the reporting requirements of Section 16(a) of the
Exchange Act or “covered employees” described in Section 162(m) of the
Code.

5. Eligibility. The Committee shall determine which Employees
shall be eligible to receive Awards. No Employee shall have at any time the
right to receive an Award, or having been selected for an Award, to receive any
further Awards.

The Committee may also grant stock options, stock
appreciation rights, restricted stock, performance awards or other Awards under
the Plan in substitution for, or in connection with the assumption of, existing
options, stock appreciation rights, restricted stock, performance awards or
other awards granted, awarded or issued by another entity and assumed or
otherwise agreed to be provided for by the Company pursuant to or by reason of
a transaction involving a merger, consolidation, plan of exchange, acquisition
of property or stock, separation, reorganization or liquidation to which the
Company or any subsidiary is a party. The terms and conditions of the
substitute Awards may vary from the terms and conditions set forth in the Plan
to the extent the Committee at the time of the grant may deem appropriate to
conform, in whole or in part, to the provisions of the awards in substitution
for which they are granted.

7.1 Types of
Options. Stock options granted under the Plan may be non-qualified
stock options, ISOs or any other type of stock option permitted under the Code,
as determined by the Committee and evidenced by the document governing the
Award.

7.2 ISOs.
The terms and conditions of any ISO shall be subject to the provisions of
Section 422 of the Code and the terms, conditions, limitations and
administrative procedures established by the Committee. At the discretion of
the Committee, ISOs may be granted to any employee of the Company and its
subsidiaries, as such term is defined in Section 424(f) of the Code
(each, a “Subsidiary”). No ISO may be granted to any Participant who, at the
time of such grant, owns more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any Subsidiary,
unless (i) the exercise price for such ISO is at least one-hundred and ten
percent (110%) of the Fair Market Value of a share of Common Stock on the date
the ISO is granted, and (ii) the date on which such ISO terminates is a
date not later than the day preceding the fifth anniversary of the date on
which the ISO is granted. Any Participant who disposes of shares acquired upon
the exercise of an ISO either within two years after the date of grant of such
ISO or within one year after the transfer of such shares to the

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Participant,
shall notify the Company of such disposition and of the amount realized upon
such disposition. The maximum number of shares of Common Stock available under
the Plan for issuance as ISOs shall be 35,000,000.

All stock options granted under the Plan are intended
to be nonqualified stock options, unless the applicable Award document
expressly states that the stock option is intended to be an ISO. If a stock
option is intended to be an ISO, and if for any reason such stock option (or
portion thereof) shall not qualify as an ISO, then, to the extent of such
nonqualification, such stock option (or portion thereof) shall be regarded as a
nonqualified stock option granted under the Plan; provided that such
stock option (or portion thereof) otherwise complies with the Plan’s
requirements relating to nonqualified stock options.

7.3 Exercise
Price and Period. The Committee shall establish the exercise price,
which price (other than for substitute options pursuant to Section 5)
shall be no less than the Fair Market Value of a share of the Common Stock on
the date of grant. Each stock option may be exercised in whole or in part on
the terms provided in the Award document. The Committee also shall establish
the period during which a stock option is exercisable, provided that in no
event may a stock option be exercisable for a period of more than ten
(10) years from the date of grant, and in no event may a stock option
become exercisable earlier than one year after the date of grant, except in the
case of:

(i)a Change of Control if so provided by the Committee;

(ii)an earlier date specifically approved by the Committee
to attract a key executive to join the Company; or

When a stock option is no longer exercisable, it shall
be deemed to have lapsed or expired.

7.4 Manner of
Exercise. The exercise price of each share as to which a stock option
is exercised and, if requested, the amount of any federal, state, local or
foreign withholding taxes, shall be paid in full at the time of such exercise.
The exercise of any stock option shall be contingent on and subject to such
payment of the exercise price and withholding taxes, or the arrangement for the
satisfaction of such payments in a manner satisfactory to the Committee. Such
payment shall be made in any of the following forms:

(i)in cash (including check, bank draft or money order),

(ii)by delivery of shares of Common Stock
owned by the Participant (by tender of such shares or by attestation) having a
Fair Market Value as of the date of exercise equal to the exercise price for
the total number of shares as to which the option is exercised, plus applicable
taxes, if requested, subject to (A) the shares so delivered being “mature
shares” for purposes of the applicable accounting rules then in effect, or
otherwise having such characteristics as are required, if necessary, in order
to avoid adverse accounting consequences to the Company on account of use of
such shares to pay the exercise price and (B) such other guidelines for
the tender of Common Stock as the Committee may establish,

(iii)if approved by the Committee in the
related Award document or other action by the Committee, authorization of the
Company to retain from the total number of shares of Common Stock as to which
the option is exercised that number of shares of Common Stock having a Fair Market
Value as of the date of exercise equal to the exercise price for the total
number of shares as to which the option is exercised, plus applicable taxes, if
requested, and

(iv)such other consideration as the Committee deems
appropriate, or by a combination of cash, shares of Common Stock, retention of
shares and such other consideration.

The Committee may, with the consent of the
Participant, cancel any outstanding stock option in consideration of a cash
payment in an amount not greater than the excess, if any, of the aggregate Fair
Market Value (on the date of such cancellation) of the shares subject to the
stock option over the aggregate exercise price of such stock option; provided,
however, that the Participant’s consent is not required for such a cancellation
pursuant to Section 13 hereof.

8. Stock Appreciation Rights. An Award of a stock appreciation right shall
entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the stock appreciation right all or a
portion of the excess of the Fair Market Value of a specified number of shares
of Common Stock as of the date of exercise of the stock appreciation right over
a specified strike price, which price shall be no less than the Fair Market
Value of a share of the Common

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Stock on the date of grant of the stock appreciation
right or the date of grant of a previously granted related stock option, as
determined by the Committee in its discretion. A stock appreciation right may be granted in
connection with a previously or contemporaneously granted stock option, or
independent of any stock option. If issued in connection with a stock option,
the Committee may impose a condition that the exercise of a stock appreciation
right cancels the stock option with which it is connected and exercise of the
connected stock option cancels the stock appreciation right. Each stock
appreciation right may be exercised in whole or in part on the terms provided
in the Award document. Stock appreciation rights granted independent of any
stock option shall be exercisable for such period as specified by the
Committee, but in no event may stock appreciation rights become exercisable
less than one year after the date of grant, except in the case of:

(i)a Change of Control if so provided by the Committee;

(ii)an earlier date specifically approved by the Committee
to attract a key executive to join the Company; or

(iii)a stock appreciation right issued as a substitute stock
appreciation right pursuant to Section 5.

In
addition, in no event may a stock appreciation right be exercisable for a
period of more than ten (10) years. When a stock appreciation right is no
longer exercisable, it shall be deemed to have lapsed or terminated. Except as
otherwise provided in the applicable agreement, upon exercise of a stock
appreciation right, payment to the Participant shall be made in the form of
cash, shares of Common Stock or a combination of cash and shares of Common
Stock as promptly as practicable after such exercise. The Award document may
provide for a limitation upon the amount or percentage of the total
appreciation on which payment (whether in cash and/or shares of Common Stock)
may be made in the event of the exercise of a stock appreciation right. The
Committee may, with the consent of the Participant, cancel any outstanding
stock appreciation right in consideration of a cash payment in an amount not in
excess of the difference between the aggregate Fair Market Value (on the date
of such cancellation) of any shares subject to the stock appreciation right and
the aggregate strike price of such Shares; provided, however, that the Participant’s
consent is not required for such a cancellation in connection with the purchase
of such stock appreciation right pursuant to Section 13 hereof.

9.
Restricted Stock. Restricted
stock may be granted in the form of actual shares of Common Stock, which shall
be evidenced by a certificate with an appropriate legend, or in uncertificated
direct registration form, registered in the name of the Participant but held by
the Company until the end of the restricted period, or share units, as
determined by the Committee. As a condition to the receipt of an award of
restricted stock in the form of actual shares of Common Stock, a Participant
may be required to execute any stock powers, escrow agreements or other
documents as may be determined by the Committee. Any conditions, limitations,
restrictions, vesting and forfeiture provisions shall be established by the
Committee in its discretion. No portion of an Award of restricted stock may
vest as to any of the shares subject to the Award earlier than one year from
the date of grant, except in the case of:

(i)a Change of Control if so provided by the Committee;

(ii)death, retirement or disability if so provided by the
Committee; or

The
Committee may, on behalf of the Company, approve the purchase by the Company of
any shares subject to an Award of restricted stock, to the extent vested, for
an amount equal to the aggregate Fair Market Value of such shares on the date
of purchase. Awards of restricted stock may provide the Participant with
dividends or dividend equivalents (pursuant to Section 17) and voting
rights, if in the form of actual shares, prior to vesting. With respect to
Awards of restricted stock intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee shall
establish and administer Performance Conditions in the manner described in
Section 162(m) and Treasury Regulations promulgated thereunder as an
additional condition to the vesting or payment, as applicable, of such Awards.

10. Performance Awards. Performance awards may be in the form of performance
shares valued with reference to a share of Common Stock or performance units
valued with reference to an amount of property (including cash) other than
shares of Common Stock. Performance awards may also be granted in the form of
any other stock-based Award. Performance awards shall entitle a Participant to
future payments based upon the attainment of Performance Conditions established
in writing by the Committee. Payment shall be made in cash, shares of Common
Stock or any combination thereof, as determined by the Committee. The Award
document establishing a performance award may establish that a portion of a
Participant’s Award will be paid for performance that exceeds the minimum
target but falls below the maximum target available to the Award. With respect
to Awards of restricted stock intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the

5

Committee
shall establish and administer Performance Conditions in the manner described
in Section 162(m) and Treasury Regulations promulgated thereunder as an
additional condition to the vesting or payment, as applicable, of such
performance awards. The Award document shall also provide for the timing of
payment, which shall not be earlier than one year from date of grant, except in
the case of:

(i)a Change of Control if so provided by the Committee;

(ii)an earlier date specifically approved by the Committee
to attract a key executive to join the Company; or

Following the conclusion or acceleration of the period
of time designated for attainment of the Performance Conditions, the Committee
shall determine the extent to which the Performance Conditions have been
attained and shall then cause to be delivered to the Participant (i) a
number of shares of Common Stock equal to the number of performance shares or
the value of such performance units determined by the Committee to have been
earned, and/or (ii) cash equal to the Fair Market Value of such number of
performance shares or the value of performance units, as the Committee shall
elect or as shall have been stated in the applicable Award document. In no
event may performance awards be granted to a single Participant in any 12-month
period (i) in respect of more than 250,000 shares of Common Stock (if the
Award is denominated in shares of Common Stock) or (ii) having a maximum
payment with a value greater than $10,000,000 (if the Award is denominated in
other than shares of Common Stock).

11. Other Stock-Based Awards. The Committee may issue unrestricted shares of
Common Stock, or other awards denominated in Common Stock (including but not
limited to phantom stock and deferred stock units), to Participants, alone or
in tandem with other Awards, in such amounts and subject to such terms and
conditions as the Committee shall from time to time in its sole discretion
determine. With respect to such Awards intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the
Committee shall establish and administer Performance Conditions in the manner
described in Section 162(m) and Treasury Regulations promulgated
thereunder as an additional condition to the vesting and payment of such
Awards. In no event may other stock-based Awards described in this
Section 11 be granted to a single Participant in respect of more than
250,000 shares of Common Stock in any 12-month period. The terms and conditions
of any such other stock-based Awards subject to time-based restrictions on
vesting will be limited as specified in Section 9 for Awards of restricted
stock.

12. Award Documents. Each Award under the Plan shall be evidenced by an
Award document (which may consist of a term sheet or an agreement, and may be
provided in electronic form) setting forth the terms and conditions, as
determined by the Committee, which shall apply to such Award, in addition to
the terms and conditions specified in the Plan. The Committee may, in its
discretion, place terms in the Award documents that provide for the
acceleration of any time periods relating to the exercise or realization of any
Awards so that such Awards may be exercised or realized in full on or before a
date fixed by the Committee, in connection with a Change of Control.

13. Change of Control. The Committee may, in its discretion, at the
time an Award is made hereunder or at any time prior to, coincident with or
after the time of a Change of Control:

(i)provide for the purchase of such Awards,
upon the Participant’s consent, for an amount of cash equal to the amount which
could have been obtained upon the exercise or realization of such rights had
such Awards been currently exercisable or payable, provided that the
Participant’s consent shall not be required if the Committee takes such action
in connection with the consummation of a Change of Control;

(ii)make such adjustment to the Awards then outstanding as the
Committee deems appropriate to reflect such transaction or change; and/or

(iii)cause the Awards then outstanding to be assumed, or new
rights substituted therefore, by the surviving corporation in such Change of
Control.

The Committee may, in its discretion, include such
further provisions and limitations in any Award document as it may deem
equitable and in the best interests of the Company.

14. Withholding. The Company and its subsidiaries shall have the
right to deduct from any payment to be made pursuant to the Plan, or to require
prior to the issuance or delivery of any shares of Common Stock or the payment
of cash under the Plan, any taxes (whether federal, state, local or foreign) to
be withheld therefrom. The Committee may, in its discretion,

6

permit a
Participant to elect to satisfy such withholding obligation by any of the
methods pursuant to which the exercise price of a stock option may be paid
pursuant to Section 7. Any satisfaction of tax obligations through the
withholding of shares may only be up to the statutory minimum tax rate. Any
fraction of a share of Common Stock required to satisfy such obligation shall
be disregarded and the amount due shall instead be paid in cash to the
Participant.

15. Transferability. Except as provided in this Section, during the
lifetime of a Participant to whom an Award is granted, only that Participant
(or that Participant’s legal representative in the case of disability) may
exercise a stock option or stock appreciation right, or receive payment with
respect to restricted stock, a performance award or any other Award. The
Committee may permit (on such terms, conditions and limitations as it
determines), an Award of restricted stock, stock options, stock appreciation
rights, performance shares or performance units or other Awards to be
transferred or transferable to the extent permissible by law and, in the case
of an ISO, to the extent permissible under Section 422 of the Code. Other
than as stated in the preceding sentence, no Award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company.

16. Deferrals and Settlements. The Committee may require or permit
Participants to elect to defer the issuance of shares or the settlement of
Awards in cash under such rules and procedures as it may establish under
the Plan. It may also provide that deferred settlements include the payment or
crediting of interest or dividend equivalents on the deferral amounts.

17. Dividends and Dividend Equivalents. An Award (including without limitation a stock
option or stock appreciation right) may, if so determined by the Committee,
provide the Participant with the right to receive dividend payments or dividend
equivalent payments with respect to Common Stock subject to the Award (both
before and after the Common Stock subject to the Award is earned, vested or
acquired), which payments may be either made currently or credited to an
account for the Participant, and may be settled in cash or Common Stock, as
determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Common Stock,
may be subject to such conditions, restrictions and contingencies as the
Committee shall establish, including the reinvestment of such credited amounts
in Common Stock equivalents.

18. No Right to Awards or Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continue in the employ of the Company or its
subsidiaries. Further, the Company and its subsidiaries expressly reserve the
right at any time to dismiss a Participant without any liability, or any claim
under the Plan, except as expressly provided herein or in any Award document
entered into hereunder.

19. Rights as a Shareholder. Unless the Committee determines otherwise, a
Participant shall not have any rights as a shareholder with respect to shares
of Common Stock covered by an Award until the date the Participant becomes the
holder of record with respect to such shares. No adjustment will be made for
dividends or other rights for which the record date is prior to such date,
except as provided in Section 17.

20. Adjustment of and Changes in Common Stock. In the event of any stock dividend or split,
recapitalization, merger, consolidation, spin-off, combination or exchange of
shares or other change in the corporate structure or shares of stock of the
Company, or any distributions to common shareholders other than cash dividends,
the Committee may make such substitution or adjustment, if any, as it deems to
be equitable, as to the number and kind of shares of Common Stock or other
securities issued or reserved for issuance pursuant to the Plan and to
outstanding Awards (including but not limited to the number and kind of shares
of Common Stock or other securities to which such Awards are subject, and the
exercise or strike price of such Awards).

21. Amendment; Repricing. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that (i) no amendment
shall be made without shareholder approval if such approval is necessary in
order for the Plan to continue to comply with the rules of the New York
Stock Exchange or if such approval is necessary in order for the Company to
avoid being denied a tax deduction under Section 162(m) of the Code, and
(ii) no amendment, suspension or termination may adversely affect any
outstanding Award without the consent of the Participant to whom such Award was
made. Except for adjustments pursuant to Section 20, in no event may any
stock option or stock appreciation right granted under the Plan be amended to
decrease the exercise price or strike price thereof, as the case may be, or be
cancelled in conjunction with the grant of any new stock option or stock
appreciation right with a lower exercise price or strike price, as the case may
be, or otherwise be subject to any action that would be treated, for accounting
purposes or under the rules of the New York Stock Exchange, as a
“repricing” of such stock option or stock appreciation right, unless such
amendment, cancellation or action is approved by the Company’s shareholders in
accordance with applicable law and rules of the New York Stock Exchange.

22. Government and Other Regulations. The obligation of the Company to settle Awards
in Common Stock shall

7

be
subject to all applicable laws, rules, and regulations, and to such approvals
by governmental agencies as may be required. Notwithstanding any terms or
conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering to
sell or selling any shares of Common Stock pursuant to an Award unless such
shares have been properly registered for sale pursuant to the Securities Act of
1933 with the Securities and Exchange Commission or unless the Company has
received an opinion of counsel, satisfactory to the Company, that such shares
may be offered or sold without such registration pursuant to an available
exemption therefrom and the terms and conditions of such exemption have been
fully complied with. The Company shall be under no obligation to register for
sale under the Securities Act of 1933 any of the shares of Common Stock to be
offered or sold under the Plan. If the shares of Common Stock offered for sale
or sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act of 1933, the Company may restrict the
transfer of such shares and may legend the Common Stock certificates representing
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.

23. Relationship to Other Benefits. No payment under the Plan shall be taken into
account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company or any subsidiary
or affiliate of the Company except as otherwise specifically provided in such
other plan.

24. Governing Law. The Plan shall be construed and its provisions enforced
and administered in accordance with the laws of the State of Minnesota applicable to contracts made and performed wholly
within such state by residents thereof.

25. Effective Date. The Plan shall be effective as of the date of
approval by the Company’s shareholders in a manner intended to comply with the
shareholder approval requirements of the New York Stock Exchange and
Section 162(m) of the Code. Subject to earlier termination pursuant to
Section 21, the Plan shall have a term of ten (10) years from its
effective date.

26. Foreign Employees. Awards may be granted to Participants who are
foreign nationals or employed outside the United States, or both, on such terms and conditions different from
those applicable to Awards to Participants employed in the United States as may, in the judgment of the Committee, be
necessary or desirable in order to recognize differences in local law or tax
policy. The Committee also may impose conditions on the exercise or vesting of
Awards in order to minimize the Company’s obligation with respect to tax
equalization for Employees on assignments outside their home country.